China Phase-Out of Ozone Damaging Chemicals Brings Climate Benefits

Last month, China was granted US$95 million to reduce its production of hydro-chlorofluorocarbons (HCFCs), substances that are used primarily for cooling, refrigeration, and the manufacture of foam products. The funding comes from the Multilateral Fund (MLF) of the Montreal Protocol, because HCFCs deplete the ozone layer and are controlled under the Protocol. With access to these funds, between now and 2015 China will reduce its production of HCFCs by 10%, or 47,000 metric tons from 2010 levels, allowing it to meet the first reduction targets set by the Protocol.

This alone is worth celebrating because China is the world's largest producer of HCFCs. Nearly 50% of its production is consumed by other developing countries, all of whom also face HCFC consumption reduction targets under the Protocol. Herein lies one secret to the Protocol’s success: its ability to regulate both production and consumption worldwide simultaneously, putting into practice an economist’s dream to tackle both supply and demand in tandem. By addressing the supply side of the problem through support to China’s production phase-out, the demand side - in China and in developing countries around the world - can build a sustainable HCFC consumption phase-out response. The ozone layer, and human and environmental health, will all be the better for it.

But this isn’t the whole story because HCFCs, like many other ozone-depleting substances (ODS), are also potent greenhouse gases, and their elimination implies serious huge climate co-benefits. More specifically, the HCFC production to be phased out will result in avoided emissions of 65 million tons of CO2 equivalent. Put it another way, the resulting CO2 reductions is equivalent to some 13.5 million vehicles off the roads. Once again, actions in support of the Protocol will result in important positive climate benefits. And this is only the first step of a multi-year HCFC production phase-out management plan that was designed for China with assistance from the World Bank. A parallel effort, with support from the World Bank, will assist Chinese foam manufacturers to achieve a sustainable incremental reduction in their HCFC demand, commensurate with Protocol targets.

Such action reflects the commitment that the Parties to the Protocol agreed in 2007 to accelerate global HCFC phase-out. As part of this approach, the protocol’s agenda has increasingly focused on important cross-cutting themes linked with the elimination of HCFCs namely, energy efficiency and climate mitigation. The World Bank’s Ozone Trust Fund Program works closely with other Bank climate programs to apply creative solutions to assist clients and tackle shared cross-sectoral challenges. New projects assess alternative technologies for potential climate impacts, benefits and trade-offs throughout the product lifecycle, from production through disposal, and in so doing better reflect the convergence of the ozone and climate agendas.

With the World Bank’s long standing partnership with China’s Montreal Protocol team solidly in place and a proven track record of earlier success, I can’t help but be excited at the significance of this recent funding approval toward realizing global HCFC phase-out goals! 10% may not sound like much, but it is a necessary cornerstone and a most critical first step, setting in motion a clear path for the remainder of the work to be done.